Answers

They just for amusement and do all kinds of screwy things. had one of mine piss me off once bad when i was dancing listening to custom music on my stereo and i moved screen away to check on another sim when i heard blasted classical music playing i was all wtf..... then i saw the gnome in front of stereo -.- they mainly just do funny/annoying things.

Vampire toddlers bite teddy bears turning them into the vampire gnomes which can also infect teddy bears. Vampire gnomes may also appear if you grow a perfect plasma fruit bush. You can sell the gnomes for about 1000 simoleons. I think the teddy bears are on the menu and turned until your vampire kid grows up. Yes, all gnomes (except Sleeping Gnome McMulty) can be annoying about turning on electronics and waking up your Sims. Some are helpful though. Like Ambitions expansion's Magical Gnome of Sculpting. You can begin a sculpture and while working on it or when you leave it half finished the gnome may appear beside it and finish the sculpture for you.